What has Ctrip acquired in three years?

Ctrip said that it may continue to acquire complementary businesses and assets in the future if presented with appropriate opportunities. It has just revealed details about its acquisitions in recent years.

In an audited annual report submitted to SEC on April 14, Ctrip revealed details about what it has acquired for the past three years.

"If we are presented with appropriate opportunities, we may continue to acquire complementary businesses and assets in the future," the company said in the report.

Fair value of long-term investments in China

ChinaTravelNews looked into the fair value of Ctrip's long-term investments in China from 2015 to 2016:

Fair value of the Tujia investment by Ctrip rose from RMB 2.877 billion in 2015 to RMB 3.082 billion in 2016 while the Hanting investment climbed from RMB 1.116 billion in 2015 to RMB 1.984 billion in 2016.

The LY.com deal's fair value dropped from RMB 1.745 billion in 2015 to RMB 1.523 billion in 2016 while Tuniu investment declined from RMB 431 million in 2015 to RMB 253 million in 2016.

Tujia

Tujia used to be a consolidated subsidiary of Ctrip. In July 2015, after a private placement of Tujia, the equity interest of the Company in Tujia was diluted to 45% and the Company was no longer entitled to appoint the majority of the board of directors of Tujia. As a result, the Company lost the control in Tujia and the financial position and results of operations of Tujia were therefore deconsolidated.

Hanting

As a result of a series of investments on Hanting in 2010, the Company holds 22,049,446 shares of Hanting, representing approximately 9% of Hanting’s total outstanding shares with the aggregated investment cost of USD 67.5 million (approximately RMB 0.5 billion). The Company does not have the ability to exercise significant influence.

LY.com (Tongcheng)

In April, 2014, the Company purchased a minority stake of LY.com with a cash consideration of approximately RMB 1.4 billion. As of December 31 2016, the Company re-measured the investment in LY.com at a fair value of RMB 1.5 billion (approximately USD 219 million), with RMB 0.1 billion unrealized gain recorded in other comprehensive income.

eHi

As a result of a series of investments on eHi since 2013, the Company has held an aggregate equity interest of approximately 14% of eHi’s total outstanding share and 19.6% of eHi’s voting power as of December 31, 2016 with the aggregated investment cost of USD 107 million (approximately RMB 0.7 billion).

Tuniu

The Company held an aggregate equity interest of approximately 4% of Tuniu as of December 31, 2016 with the aggregated investment cost of USD 50 million (approximately RMB 0.3 billion). The Company does not have the ability to exercise significant influence. As of December 31 2016, the closing price of Tuniu was USD 8.75 per ADS. The Company remeasured the investment in Tuniu at a fair value of RMB 253 million (approximately USD 36 million), with RMB 94 million unrealized loss recorded in other comprehensive income.

Ctrip's major acquisitions in 2014-2016

* In November 2013 and October 2014, it consummated the acquisition of the entire equity shares in Joint Wisdom, a technology company focusing on hotel customer reviews through step acquisitions with total purchase consideration of RMB 240 million which included cash consideration of RMB 110 million and the previously held 35% non-controlling interest with the fair value of RMB 130 million.

* In December, 2014, it completed the transaction to acquire 43% equity stake and obtained majority voting power of offline travel agency Huyuan International Travel for RMB308 million (USD 50 million).

* In April 2014, it purchased a minority stake of LY.com.

* In 2014 and 2015, it invested a total of USD 50 million for 4% stake in Tuniu, a well-known service provider in leisure package tour market.

* In May 2015, it acquired 38% equity stake in eLong, from certain selling shareholders, including Expedia, together with several other investors. It also participated in a buying consortium together with Tencent in eLong’s going private transaction subsequently.

* In October 2015, it completed a share exchange transaction with Baidu, obtaining 45% of the aggregate voting interest of Qunar in exchange for its newly issued ordinary shares.

* In late 2015 and early 2016, it agreed to make certain investments in form of limited partnership contribution or other financing arrangements in several non-U.S. investment entities dedicated to investing in businesses in China. As of December 31, 2016, it issued an aggregate of 6.2 million ordinary shares and provided capital contribution or financial support in a total amount of USD 1.3 billion in cash to some of these investment entities. These entities have acquired a significant portion of the shares of Qunar not otherwise owned by Ctrip through privately negotiated transactions.

* In January 2016, it invested USD 180 million in MakeMyTrip, India’s largest online travel company, via convertible notes, and subsequently appointed a director to MakeMyTrip’s board of directors. In October 2016, it converted all of its convertible notes into 10% equity interest of MakeMyTrip.

* In April 2016, it announced strategic collaboration with China Eastern Airlines, one of China’s three major air transportation groups, on a broad range of products and services. In June 2016, it invested RMB 3 billion for 466 million A shares of China Eastern in a private placement. It may in the future invest in up to 10% of the shares of China Eastern Airlines, and may also nominate a representative to its board.

* In October 2016, it participated as a member in the buying consortium in Qunar’s going private transaction and rolled our then existing equity stake into the entity that wholly owns Qunar upon completion of the transaction in February 2017.

* In December 2016, it consummated the transaction of acquiring nearly all shares of UK travel search site Skyscanner for ￡1.4 billion, which consists of ￡1.2 billion in cash and the remainder in Ctrip's ordinary shares.

* In December 2016, it completed a share exchange transaction with BTG Hotels (Group), a PRC joint stock company that is listed on the Shanghai Stock Exchange and principally engaged in the management of hotels and tourism destinations. Ctrip exchanged its 15% equity interest in Homeinns Hotel Group, in consideration for 104,901,899 ordinary shares, or 21.93% equity of BTG.

Ctrip Share Ownership

Ctrip's corporate structure

Ctrip also identified an investment risk from the Chinese regulators:

"In particular, our strategy of acquiring or investing in a competing business could be adversely affected by uncertainties in the implementation and enforcement of the PRC Anti-Monopoly Law."

In connection with strategic acquisitions over the recent years, there has been a significant increase of goodwill and indefinite lived intangible assets booked in Ctrip's financial statements.